Chapter 7 bankruptcy may help stop a foreclosure sale on your home under certain conditions. If possible you may have the option to cure your default by making payments or negotiating with your lender on a solution. While there are other options to consider it is possible the sale may be completed on the home unless you take swift action.
Chapter 7 bankruptcy may help temporarily stop a foreclosure sale. When you file the automatic stay goes into effect. This prevents further collection activity from your lender. This also gives homeowners more time to seek a solution that may help you keep your home. You may choose to cure the default by paying off what is owed or negotiate a deal with your lender. The extra time may even allow you to find a new place to live should you decide to let the house go.
As long as the automatic stay remains in effect the lender can't move forward with the foreclosure sale. Keep in mind, in some situations a lender may choose to obtain a court order to remove the stay but only under certain circumstances.
Other options to consider in avoiding foreclosure include mortgage modification. Modifying your mortgage loan with your lender may help you obtain a lower monthly payment or extend the amount of time you have to repay the loan. Chapter 13 bankruptcy is another option that helps structure outstanding debt into a repayment plan approved by the court. The plan can last from 3 to 5 years and gives debtors an opportunity to get caught up on mortgage payments. You'll need to make sure you make payments regularly in Chapter 13 to avoid foreclosure .
If you have any questions or concerns regarding chapter 7 bankruptcy or how to stop a foreclosure sale, don't hesitate to contact us today for a free consultation.